The pro’s and cons of having a no annual fees credit card

Last updated on November 25th, 2021
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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Looking for a credit card that comes with the best features suited towards your spending needs but trying to avoid accumulating a hefty annual fee then you might want to consider a no annual fees credit card. A no annual fees credit card could potentially save you hundreds of dollars, but is it really worth having in your wallet? Here are a few things you need to consider.

What is a no annual fees credit card?

Most credit cards usually charge an annual fee to cover the various features that come with a credit card. The higher end the features are the more likely you are to fork out in annual fees. The average credit card annual fees usually range from as little as $50 – $500. A no annual fees credit card means that you pay $0 in credit card annual fees.

Will I pay no fees whatsoever for the duration of the card?

No annual fees credit cards can easy your finances without the annual fee that increases p.a. However, you should read the fine print that comes with the card as not all no annual fees credit are created equal. Some cards will charge you $0 for the period in which you have the card, but other cards may require that you spend a certain amount or have a limited period in which the $0 annual fee is applicable.

Can I still get the perks of features with a no annual fees?

As you already know annual fees are there to pay off features that come with a credit card such as; complimentary travel insurance, concierge service, price protection, and airport lounge access features. With a no annual fee credit card you still get these features and reward programs, but once again not all credit cards in these group are created equal. This is where you need to compare your credit card to find one that has the best features with the sweet promise of a no annual fee.

What are the cons that come with the card?

It is important that you check if everything about the credit card aligns with your financial needs. This means reading the fine print, features, and interest rate.

  • The cons of owning this card mean that you are most likely to pay a high interest rate.
  • If you fail to pay off the balance in full that is owed on the card each month the benefit of not paying an annual fee gets cancelled.
  • There is also a promotional period on some credit cards, and some require that you meet criteria before unlocking the perks of paying no annual fee.

Things that you can do that will make you attract fees

Although a no annual fees credit card promises no annual fees payment there are things that you could do that could attract fees that you don’t want to see added to your monthly balance.

  • Late payment fee can be charged to you if you pay off your credit card late.
  • Paper statement fee will be charged to you if you choose a paper statement over an online statement. However, this depends on which lender you have taken the card from.
  • Cash advance interest for money that is withdrawn from an ATM can be charged interest on the amount you have taken out.
  • Foreign transaction fees can be charged to your card if you decide to use it overseas. If you are looking for a card that will not attract hefty fees from foreign transactions its best to get a 0% foreign transaction credit card.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

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